Memorial Health System in Marietta, Ohio, says it is still waiting on about $80 million in Medicaid supplemental payments that cannot be paid until federal regulators sign off. Chief executive Scott Cantley told Becker’s Hospital Review that about $60 million is tied to the Rural Ohio Hospital Tax Pilot Program, which has been awaiting approval from the Centers for Medicare & Medicaid Services for about 15 months.
The remaining $20 million comes from Ohio’s 2026 Hospital Additional Payments program. Cantley said this is the first time in his 32 years working in Ohio hospitals that those payments have gone unpaid.
The delay matters most to families in the Mid-Ohio Valley who depend on a local hospital for births, children’s care and emergencies. The money supports day-to-day operations, and Memorial had counted on it to back the debt for a new Women and Children’s Hospital in Belpre, built with Akron Children’s Hospital.
A Rural Pilot Still Waiting in Washington
The pilot program is a state-directed payment arrangement, the first in Ohio created specifically for rural hospitals. Under a 2025 state budget provision, participating counties assess a tax on local hospitals, and that money serves as the state’s share of higher Medicaid payments, which then draw federal matching dollars.
Washington County commissioners approved the local hospital assessment in July 2025, according to the Marietta Times. Marietta Memorial and Selby General hospitals are among the participants, the News and Sentinel reported, and the payments require federal approval.
State officials say their part is done and the remaining step is federal. The Ohio Department of Medicaid told Becker’s it has provided the information CMS requested and completed all required submissions, and the program is now awaiting federal action.
Ohio’s design relies on county-level funding, similar to programs CMS has approved in Texas, New Jersey and Florida. In September, CMS approved about $12 billion in Texas Medicaid directed payments after months of negotiation. The Texas Hospital Association had warned the standoff was costing providers an estimated $27 million a day, according to Healthcare Finance News.
CMS has not publicly explained why the Ohio proposal remains pending, and Becker’s report did not include a response from the agency. Directed payment approvals usually come within several months of submission, according to industry observers cited by the Healthcare Financial Management Association.
Payroll, Supplies and a Building Waiting for Steel
Cantley said the missing money touches nearly every part of the system. The delays affect nurses’ salaries, supplies, equipment repairs, and replacement beds and wheelchairs, he told the News and Sentinel. “Those are the funds that operate the hospital,” he said.
The Belpre project broke ground in October 2024, and site work is largely done. Memorial recently completed a USDA loan process, but Cantley told Becker’s he will not ask the board to approve the financing needed to finish construction until the pilot payments are approved. The News and Sentinel reported that approval within the next few weeks could let Memorial proceed with financing and keep a fall 2028 opening possible.
Memorial is not alone. Ohio’s budget office reported in May 2026 that approval delays accounted for roughly $1.6 billion in Medicaid spending below year-to-date projections, the News and Sentinel reported. Nationally, hospital associations in at least 10 states reported delayed payments in 2025, some dating to fall 2024, Becker’s reported.
“This is where it should be focused because these are the hospitals that are most vulnerable,” Cantley told Becker’s, arguing that rural hospitals are an appropriate use of the federal program.
Families Who Depend on Small-Town Care
The people with the most at stake are pregnant patients, parents of young children and Medicaid members in the Mid-Ohio Valley.
Rural families often travel long distances for labor and delivery, neonatal care or pediatric specialists when local services are limited. A new women’s and children’s hospital is meant to keep more of that care close to home, so a delay in financing can mean a longer wait for closer care.
Neither Becker’s nor the News and Sentinel reported service cuts, layoffs or closures tied to the delay. Patients should keep scheduled appointments and planned deliveries. Medicaid members with questions about coverage can call the Ohio Medicaid Consumer Hotline at 1-800-324-8680.
For families planning a pregnancy or managing a child’s chronic condition, it is reasonable to ask a clinician which services are available locally and where referrals would go. Anyone with chest pain, trouble breathing, heavy bleeding in pregnancy, or a seriously ill child should still go to the nearest emergency department.
Open Questions for CMS and Ohio
Several key details remain unclear. CMS has not said when it will rule on Ohio’s pilot program, whether it is seeking changes, or whether approval would release both the pilot and the 2026 additional payments at the same time.
The timing also overlaps with federal changes to directed payments. The 2025 federal budget law caps new directed payments at Medicare rates in Medicaid expansion states such as Ohio, and a pending CMS proposal would put those limits into regulation. That could shrink what Ohio can pay rural hospitals even after approval.
Three Ohio congressional representatives, David Taylor, Mike Carey and Michael Rulli, have contacted CMS on Memorial’s behalf, according to the News and Sentinel. MedicalDaily will report on any CMS decision and whether the Belpre financing moves forward this fall.
Key Questions Answered
What payments is Memorial waiting on? About $80 million, including roughly $60 million from the Rural Ohio Hospital Tax Pilot Program and $20 million from Ohio’s 2026 Hospital Additional Payments program.
Why does CMS need to approve them? The pilot is a Medicaid state-directed payment program, and federal rules require CMS approval before payments can be made.
How long has the pilot been waiting? About 15 months, according to Memorial’s CEO.
What project is affected? Financing for the Women and Children’s Hospital in Belpre, a partnership with Akron Children’s Hospital.
Have any services been cut? None have been reported. Neither Becker’s nor the News and Sentinel reported cuts tied to the delay.
What should patients do? Keep scheduled care and call the Ohio Medicaid Consumer Hotline at 1-800-324-8680 with coverage questions.
Published by Medicaldaily.com
